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Truckers Become Another Casualty of the Trade War

| September 20, 2019

There has been a lot of news about US farmers suffering due to the trade war. Now we can add another profession to that list: truck drivers.

Many trucking companies are being squeezed on all sides. Last year freight shipping rates were soaring due to a lack of industry capacity. Trucking companies responded by increasing driver pay to compete for workers and placing new equipment orders.

Many of those trucking companies are now being blind-sided by a sharp decrease in demand for freight shipping as the trade war causes global manufacturing output to slow. So far this year over 600 trucking companies have declared bankruptcy which is a 265% increase over the same period from 2018.

Dow Theory is an investment approach that uses the Dow Jones Transportation index as a leading indicator for the Dow Jones Industrial Index. The theory is that an economic slowdown will impact transportation companies first. Over the past twelve months the Dow Jones Transportation index has declined more than 10% while the Dow Jones Industrial Average has been flat. This may be yet another sign of the adverse impacts that trade war is having on the US economy and businesses.